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Your hot water heater can account for up to 18 percent of your domestic energy bill. This can really boil your bank account. To have hot water available at your beck and call, conventional water heating systems burn gas or electricity regularly. Though there is no escaping the energy costs of operating a water heater, there are a number of ways you can take the edge off your water heating expenditures.

Insulate Your Water Storage Tank

Though most new water tanks feature built-in insulation, many older models do not. According to the U.S. Department of Energy, insulating your hot water tank can help improve energy efficient by up to 45 percent by reducing standby heat loss. With a properly insulated tank, you could end up saving up to 9 percent a month in water heating costs. Water tank insulation is available in an easy-to-install precut jacket. Refer to your unit’s owner’s manual before installing.

Insulate Your Pipes

Anything you can do to decrease residual heat loss from any active component of your water heating system will help you save money. Insulating your water storage tank is a good start, but you will also benefit from insulating the appropriate pipes. The U.S. Department of Energy recommends insulating the first six feet of both the hot and cold water pipes connected to your water heating system. This can help ensure your water heater isn’t working harder than it needs to for your desired water temperature.

Remove Sediment

Over time, sediment in your house’s incoming water supply can build up and settle on the bottom of your water heater. If enough sediment accumulates, it can reduce the overall energy efficiency of gas-powered heaters by acting as an insulating layer between the heat source and the water. It’s a good idea to drain at least a quart of water from your water tank every few months. This can help to flush out the accumulated sediment and keep your system running as efficiently as possible. When draining your water tank, make sure to turn off the electricity or gas supply and to closely follow manufacturer guidelines.

Consider On-Demand Water Heaters

Depending on the age and condition of your current water heater, you may be best served by purchasing a brand new, energy-efficient system. Consider an on-demand water heater for your home. These systems bypass the need for a storage tank entirely by heating water directly, as needed. On-demand systems can save you up to 30 percent in energy cost per month. To increase your savings even further, make sure your on-demand system is Energy Star-certified. Such certified heaters are energy-efficient and can save you money in energy costs throughout their operational lifetime.

About the Author

Bill Reynolds holds a Bachelor's degree in Communications from Rowan University. He has written hundreds of articles for print and online media, drawing inspiration from a wide range of professional experiences. As part of the UCLA Extension Writer's Program, he has been nominated for the James Kirkwood Prize for Creative Writing.